While Bilfinger SE (ETR:GBF) might not have the largest market cap around , it saw significant share price movement during recent months on the XTRA, rising to highs of €51.90 and falling to the lows of €45.05. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Bilfinger's current trading price of €49.30 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Bilfinger’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Bilfinger

What's The Opportunity In Bilfinger?

Good news, investors! Bilfinger is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 8.67x is currently well-below the industry average of 18x, meaning that it is trading at a cheaper price relative to its peers. However, given that Bilfinger’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Bilfinger?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -5.3% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Bilfinger. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although GBF is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to GBF, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on GBF for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.